“Our industry has become what it is in the context of the U.K., so if you decide to divide it into two markets that is significant,” said Owen Kelly, chief executive officer of Scottish Financial Enterprise, an industry association whose members represent about 80 percent of those people working in financial services. “Politics is determining this choice and not the interest of our industry.”

The cradle of the Scottish Enlightenment, the city was also a wellspring of modern finance and economics. Adam Smith developed his theories there and lectured at Edinburgh University. Two clergymen helped pioneer life-insurance funds during the Napoleonic Wars; pools of local money helped build railroads in the U.S. The end of 307 years of union with England and Wales would make Edinburgh Europe’s next capital. The question is whether it would exact an economic price.

‘Bigger Issues’

Bankers and fund managers are reticent to talk about the vote, referring to comments from their CEOs.

“We’ve coped with bigger issues during the financial crisis,” Colin McLean, 61, who founded SVM Asset Management Ltd. in 1990 and expanded it into a firm overseeing about $800 million, said in an interview at his office overlooking Edinburgh Castle. “If it is indeed a problem it wouldn’t be bigger than what we’ve faced.”

Standard Life, founded in 1825, is making contingency plans to shift business elsewhere should voters opt for independence. Its client base tracks the U.K. population: Scotland makes up 8.4 percent of the U.K.’s 63 million people.

Lloyds Banking Group Plc (LLOY), owner of Scottish Widows (SWIPRTA), which started one of the first life-insurance funds in 1815, is considering a move to London. Lloyds appointed Jim Coyle, group financial controller, as director of Scottish affairs responsible for leading contingency planning, according to an internal memo sent to staff in June.

Crisis Bailouts

Royal Bank of Scotland, known as RBS and the biggest recipient of U.K. taxpayer money during the 2008 banking bailout, is having “conversations” with regulators, Chief Executive Officer Ross McEwan said in July. The trouble is, the bank doesn’t know what it’s preparing for, he said.

Lloyds also needed emergency aid in 2008 after its takeover of HBOS Plc -- owner of the Edinburgh-based Bank of Scotland -- went awry during the crisis.

Central to the bankers’ concerns are currency and regulation. They may be deprived access to the Bank of England as a lender of last resort, putting the new state on the hook to support an industry with assets the U.K. Treasury says are more than 13 times the size of an independent Scotland’s 150 billion-pound ($245 billion) economy.

Standard & Poor’s said in April that an independent Scotland might find it “challenging” to support locally based banks in times of financial stress.

Many Questions

“Contingency planning by the banks has to be at a very high level,” Brian Quinn, a former deputy governor of the Bank of England and now an honorary professor of economics at Glasgow University, said in an interview. “There are just too many questions which are unanswerable for them to make detailed contingency plans.”

U.K. and Scottish politicians would negotiate the terms for splitting the two nations over an 18-month period in the event of a Yes vote before independence on March 24, 2016, according to the Scottish government’s blueprint.

First, voters must have their say on Sept. 18. Both sides say the battle with go down to the wire. A YouGov Plc poll this week showed backing for the No campaign slipped to 53 percent while support for independence increased to 47 percent when excluding undecided voters. That six-point gap narrowed from 14 points in a survey by the same pollster two weeks earlier.

Heated Campaign

Conflicting information from the pro-U.K. camp led by Alistair Darling, the former U.K. chancellor of the exchequer who led the rescue of RBS, and Scottish First Minister Alex Salmond’s nationalists has done little to clarify the risks, some voters say.

“It’s very hard to figure out what my bank balance will look like,” Suzy Powell, a 45-year-old public-relations professional, said outside the original RBS headquarters in St. Andrew Square. “It’s difficult to discern all the facts so I will go with my heart.” That’s a Yes vote, she said.

Edinburgh has a population of about 480,000, roughly the size of Atlanta without the metropolitan area. Almost one in eight employees in the Scottish capital works in financial services. The number of people employed in the industry is back to its pre-crisis level. After dropping about 6 percent in 2010 to 35,800, it rose to 38,000 in 2012, a jump of 10 percent from the year before.

More broadly, business services account for 34 percent of the labor market in Edinburgh, roughly the same as London, according to data from the Office for National Statistics.

Finance City

The New Town, built at the start of the 19th century, is crisscrossed by street names evoking the monarchy and union, such as George Street, Princes Street and Rose Street. Bars and restaurants have opened in buildings vacated as the finance industry grew and companies moved to larger premises.

In its blueprint for independence, the Scottish government plans to create its own banking regulator and retain membership in the European Union. The lender of last resort would still be the Bank of England, based on the nationalists’ plans to form a currency union with the rest of the U.K., something the main political parties in London reject.

The industry has yet to be convinced, according to Kelly at Scottish Financial Enterprise.

“The benefits are theoretical whereas the costs and complexity are quantifiable,” he said.

Like when RBS almost collapsed six years ago. The bank itself was founded in the wake of the 1700 failure of a trading colony in Panama, an event that bankrupted Scotland and paved the way for the Acts of Union seven years later.

RBS Decline

RBS went from being Europe’s biggest by assets to being a symbol of the excesses of the pre-crisis era, with a loss of 86,200 jobs, or 43 percent of its workforce, from 2008 to June this year. RBS has 12,000 employees in Scotland, with its 350 million-pound campus headquarters on the western outskirts.

The U.K. government, as majority shareholder in RBS, may insist the bank move its headquarters, said Charles Goodhart, a former member of the Bank of England’s monetary-policy committee and a professor at the London School of Economics.

“I cannot assume a majority owner would do anything other than transfer the HQ to, let’s say, London,” he said. “As a majority owner, that’s where you would want it domiciled.”